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Posted Jan 27, 2012, 1:58 AM
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Registered User
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Join Date: May 2009
Location: Winnipeg
Posts: 2,047
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Quote:
Originally Posted by Rico Rommheim
No I'm just asking questions. I never heard of centre port before. Before this thread I didn't it was possible for a prairie city to have a port. Then I did some research and found out about dry ports, which I didn't know existed.
So, is this centre port thing a proposal, or has it been there for a while? What kind of facilities does it have?
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I believe Roccerfeller provided the best explanation for what it may potentially be:
Sorry Roccerfeller, hope you don't mind.
Quote:
Well its just a designated area - officially designated by the federal government - where taxed goods and duty fees are overlooked and business may go about "free" market value
for instance, just as a very simple example, say a company like Volkswagen builds a manufacturing plant in this zone. This would be like them building a plant in Germany (their home country), where they can put together a vehicle at their own cost (German market cost).
Whey they ship cars to Canada, they have to undergo taxes and border customs, which contributes to the higher price of the car than say a domestic car. And, say they build a plant in Ontario, and only ship parts to Canada rather than whole cars, and the parts are put together in Ontario, which would be cheaper for them shipping-wise, but because they are putting their product (a German product) in a foreign market (Canadian) they must still pay taxes. These are primarily duty fees, that say if there was a Canadian car manufacturer, would not have to pay. This is also why "imported" vehicles such as Volkswagen or Toyota are generally more expensive than Fords or GMs cars; these extra taxes play a role as do increased shipping costs are warehousing, retailing etc...a bunch of things are involved in that.
If you go to the UK or Germany for example, dollar for Euro the Volkswagen will be cheaper in Germany (the exact same car) as a result as well.
The advantage of the FTZ is that it nullifies the cost cutting measures companies take, and therefore either making it cheaper for companies to operate or cheaper and more efficient. FTZ's are only good from the business perspective. Again, with Volkswagen's hypothetical example, this would mean that they could set up a manufacturing plant in CentrePort's FTZ; they could ship all the parts there (cheaper than shipping whole cars) and get the cars manufactured there as if each separate part (doors, engines, hoods, glass etc..) did not have to pay a duty charge for entering the Canadian border.
So in the end, the item is cheaper for the manufacturer to produce, because its all the costs in manufacturing a vehicle are not on taxed land, so when you ship parts there, you need not worry about taxes until the product is in the dealership, much like any "domestic" vehicle, or say if the cars needed simply to be stored, they would not be taxed until later or not even taxed at all. Its a really big deal for large businesses especially when you're talking about companies that deal with hundreds of millions of dollars in revenues through goods.
Another huge plus, is it cuts off lengthy and sometimes costly border checks so you can skip that whole process.
Yet another advantage is a company might not necessarily build their own warehouse; there might be some mega warehouses that many companies share thus saving on development costs. These are common in FTZ's around the world.
But one of the biggest advantages, is Governments will give companies incentives, such as start-up bonuses or tax cuts or whatever. This is huge, because it makes companies want to move there and set up a huge base there.
Its actually really good you brought this point up, because this area in Winnipeg's CentrePort is the first FTZ in Canada, and Canada's only FTZ for the likely future.
We won't see the benefits until CCW is complete, and there is more progress made on CentrePort in general, but these "main anchor" tenants would all have strong presence in the FTZ, as a FTZ isn't really anything but a piece of paper until the proper infrastructure and development is there. Its basically just an empty field waiting to be developed on currently. Businesses need to see that there is something concrete first; otherwise no way are you going to spend tens or hundreds of millions of dollars on a warehouse or manufacturing plant. So basically we need to see CCW complete at the earliest and all the sewage stuff complete first. Don't expect any news on FTZ related projects till at the very earliest when CCW opens up, which will be in 2014 sometime. The wastewater & water stuff (that $17 million dollar agreement that was finally reached) will only service the first 1,100 acres of CentrePort's 20,000 acre footprint, so it might be a long time before you hear anything concrete, barring a large and aggressive announcement of something big like a "major tenant" committing to the area before that.
That said, the FTZ is one of the most important economic things that exists in Winnipeg today, and was a huge deal for the Federal Government to do; hence why the mandate that was passed by the Prime Minister several years ago was a very big deal. It is also what separates the Inland Port in Winnipeg from any other competing start-up inland port projects (like the ones in Edmonton & Regina)
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Officially posted by Roccerfeller on Centreport Thread.
CCW =Centreport Canada Way, a new designated freeway being built through the port area.
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